Sunday, October 12, 2014

How Technology Makes More Effective Labor

In growth theory, we learn that labor is the hours we put in. Capital is the depreciable tools that make those hours more productive. Technology is the non-depreciable ideas that make us act like we have more virtual hours than actual hours.

This is effective labor. One way technology does this is by allowing us to control more pieces of capital at the same time.

Consider this video about how the desktop has evolved over the last 30 years: